Microsoft has announced it’s  new Windows Live products, Windows Live Folders and Windows Live Photo Gallery.

The New Windows Live Folders is Microsoft’s online storage application, which will compete with the AOL’s Xdrive, Box.net, and a lot of other online storage solutions in this market. Windows Live Folders allows  500 MB storage limit, which is a quite low compared to competitors like Xdrive which provides 5 gigs or Box.net which provides 1 gig of storage for free, the reason to keep this low is because they want to encourage storing and sharing of documents and not music and videos.

The Windows Live Photo Gallery is basically an upgrade to Vista’s Windows Photo Gallery, providing interoperability with Windows Live Spaces and Windows itself. It can also be installed on Windows XP SP2.

In Vista, it integrates heavily with features already built into the OS, making it easy to make a movie out of your pictures or burn a picture CD.

“photo stitching” is a new feature which is cool, you can select a series of photos in the same location and then stitch them together to make a big panoramic photo.

Both of these products will be released to beta testers.They are likely to be out for use by winter.